Kim Heng’s wholly-owned subsidiary will be selling its property at 48 Penjuru Road to GreenTec Energy for a sale consideration of $13.5 million.
The property, which comprises a purpose-built four-storey single-user warehouse with ancillary offices, an open waterfront fabrication and a storage yard, has a site area of 19,512 sq metres and a floor area of 13,340.4 sq metres.
It was used for the group’s internal use as office premises and operations. Kim Heng will consolidate its operations at its Pandan Crescent office which is where its yard is located.
The sale price of $13.5 million will be paid in three parts. The first is through a good faith deposit of $675,000 which has been paid on March 31, 2025, and the next is through a balance option fee of $270,000 which will be paid to the vendor in exchange for the issuance of the option to purchase.
The balance sale price of $12.55 million will be paid upon completion of the proposed sale.
The property has a net book value of $15.1 million as at Dec 31, 2024, and assuming that the sale was completed on Dec 31, 2024, the loss on the proposed sale would be $1.65 million.
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The rationale for the proposed sale despite the loss of $1.65 million is that it will improve the company’s cash position and net gearing, and allow the group to consolidate and streamline its business operations thereby realising cost savings.
The company also confirms that the sale price is the best price offered for the property as Jurong Town Council (JTC)’s investment criteria for the property limits the sale to a company engaged in businesses involving use of the waterfront, narrowing the potential buyer pool.
The group will use net proceeds to repay bank loans and for working capital, as well as for the company’s expansion plans and purchasing distressed assets.
Shares in Kim Heng closed flat at 7.5 cents on Apr 1.
